Huatai | Macro: Launch - Middle East Conflict "Pressure Index" Daily Monitoring System (March 19)

(Source: Huatai Ruisi)

First Release: Since the U.S.-Israel joint military action against Iran on February 28, the Middle East situation has rapidly escalated. The intensity of the conflict has increased, and its impact on global energy, transportation, basic materials, supply chains, and financial systems is becoming more evident. Meanwhile, during multi-party negotiations, changes in economic, political, and financial markets have become important indicators of the “pressure level” of the Middle East conflict. As seen during COVID-19, post-pandemic recovery, and the Russia-Ukraine conflict, indicators such as economic and industrial chain stability, prices of key materials, financial market pricing, and tail risk probabilities change rapidly under external shocks, requiring daily monitoring. Therefore, Huatai Macro has launched the “Daily Monitoring System for the Middle East Conflict ‘Pressure Level’,” updated every working day. This product aims to help the market more promptly price related risks. The system is divided into 8 parts: ① Conflict intensity and logistics pressure; ② Related energy and logistics price trends; ③ Food and chemical product price transmission; ④ Changes in growth and inflation expectations; ⑤ U.S. and global financial conditions and liquidity indicators; ⑥ Market “panic level” indicators; ⑦ U.S. domestic political pressure barometer; ⑧ Emergency policies of various countries.

Currently, the energy gap and global logistics pressure caused by this round of Middle East conflict are still rising. Market expectations for the duration of the conflict and related risks are deteriorating, but market pricing has not yet entered the “panic” zone. Meanwhile, internal U.S. inflation pressures and political resistance continue to rise, indicating increasing economic and social costs of the conflict.

1. Conflict intensity and logistics pressure: The Strait of Hormuz has been near “navigation disruption” for over 20 days, with daily transit volume remaining in the low single digits (about 95% lower than before February 28), mainly involving Iranian ships. Although missile and drone launch density has decreased, attacks have expanded to energy infrastructure, and the conflict continues to escalate. The global logistics blockade may now be significantly more severe than during the Russia-Ukraine conflict.

2. Trends in energy, chemical, supply chain pressures, and logistics prices: Not only are short-term oil prices continuing to rise, but Brent crude futures for December 2026 delivery have increased to $78.3 per barrel. The annual average price has risen by 30% from pre-war levels, from $65.8 to $85.5 per barrel, reflecting market expectations for a prolonged conflict. Logistics prices are also climbing steadily. Prices of various foods and chemicals in the Middle East have surged sharply, with signs of price increases spreading globally, though the price gap with the Middle East and directly affected regions remains large.

3. Changes in growth and inflation expectations and market panic index: Although the balance between growth and inflation expectations is beginning to worsen, current market pricing suggests the impact of this conflict on growth is less severe than during the Russia-Ukraine conflict in 2022, and the rise in long-term inflation expectations is not yet obvious. On the other hand, risk indicators are mainly rising in directly affected regions (such as the Middle East) and high-leverage markets (like South Korea), but have not yet spread globally. Certainly, the high inflation and rapid Fed rate hikes in 2022 made market sentiment more “fragile,” but if the conflict duration significantly exceeds expectations, current risk pricing may still be overly optimistic.

4. Changes in U.S. domestic political pressure: Compared to the Iraq War in 2003, U.S. public support for this conflict is relatively low (30-40% vs. 80-90%). As the conflict unfolds, public support continues to decline, now below 30%.

5. Emergency measures by various countries: Currently, dozens of countries and regions worldwide have implemented measures including supply assurance, price interventions, and demand controls. Developed countries, including the U.S., Japan, South Korea, Australia, and European nations, mainly focus on ensuring supply, while some Southeast Asian and South American developing countries have begun implementing price interventions. Among these measures, demand control has the highest social cost and is currently only being carried out in Southeast and South Asian developing countries. However, if shortages persist longer, such “high-cost” measures may extend to medium-sized countries and even some developed nations.

Risk warning: Unanticipated disorderly escalation of conflict and damage to energy and public infrastructure.

Contents

1. Conflict intensity and Strait passage status

2. Trends in energy and logistics prices

3. Price transmission of food and chemicals

4. Changes in growth and inflation expectations

5. U.S. and global financial conditions and high-frequency liquidity indicators

6. Market “panic level” indicators

7. U.S. domestic political pressure barometer

8. Overview of emergency response policies by various countries

Main Text

1. Conflict intensity and Strait passage status

2. Trends in energy and logistics prices

3. Price transmission of food and chemicals

4. Changes in growth and inflation expectations

5. U.S. and global financial conditions and high-frequency liquidity indicators

   1. U.S.

   2. Global

6. Market “panic level” indicators

7. U.S. domestic political pressure barometer

8. Overview of emergency response policies by various countries

Source

This article is excerpted from the “Daily Monitoring System for the Middle East Conflict ‘Pressure Level’” published on March 20, 2026 (March 19).